Most Read Contributor in New Zealand, September 2016
final guidance note issued today by the Financial Markets
Authority will make a useful contribution to the smooth operation
of the securities market and reflects well on the FMA and on the
The FMA put out a revised draft note in April and called for
further feedback after it became clear from the first submission
round that there were a number of issues of substance to be
The result is a much better and more workable document.
The final note is explicit about which aspects of the advice
apply to prospectuses and which to investment statements and that
you don't need to repeat in full all of the information in your
prospectus in your investment statement. Where both documents are
combined into a single document, the guidance applies to that
Express acknowledgment that registered banks are already
subject to a rigorous disclosure regime through the Reserve Bank of
New Zealand Act 1989 and that their disclosure statements under the
Reserve Bank Act align with the prospectus requirements.
Clarifying that the note is not specifically directed at
advertisements and that these will be dealt with separately
Further clarification that the guidance note does not change
the legal requirements for disclosure documents but is intended
simply to assist compliance with those requirements.
Acknowledgment that the test for materiality is information
that is likely to affect the judgement of a prudent but non-expert
investor when making a decision about whether to invest.
The guidance will apply to new issues from 9 July and, for
continuous issuers, to new documents issued after 1 January 2013.
Initially 1 January was to be the deadline for compliance for
continuous issues but the FMA has recognised that this would have
entailed significant time and expense for many issuers.
Chapman Tripp comments
Both sets of changes made by the FMA in response to the two
consultation rounds are changes for the better and address many of
the points we made in our submissions (
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